City Council scores hat-trick of wrongs!
CUPE and other employees groups in the plan told Councillors on several occasions they are legally required to approve the contribution rate increase recommended by the plan’s actuary.
On Tuesday, however, City Councillors voted to break the law by denying the rate increase – a decision that could cost taxpayers dearly if the matter ends up in court.
That decision to ignore its legal obligations to pension plan members has many shaking their heads, including Vancouver-based pension lawyer Scott Sweatman.
As Sweatman told a Global television reporter this week: “They [City Councillors] can’t walk away from their financial obligations because they don’t like the design of the plan. If it went to court the allegation would be breach of trust, breach of their statute, and their fiduciary obligation to act in the best interests of the plan members.”
What’s the difference between our plan and the City’s proposal?
Retirement security. That’s the short answer. Here’s the longer one:
Our existing plan is a defined benefit pension plan. This is the best type of retirement plan because your benefits are secure and not dependent on the financial markets. Your pension benefit is based on a fixed percentage of your earnings and the number of years you belong to the plan. There’s no guess work.
A defined benefit plan requires members to pre-pay their pension benefit over their working life. In the case of our plan, members must pay 50 per cent of this cost – and we do. Every pay period we set aside a portion of our wages so that we will have a secure and adequate pension benefit, payable for life. Our pension benefits also are partially protected against inflation.
The employer’s proposal
The City wants to replace our defined benefit pension plan with a target pension plan. The name says it all. The level of benefits in the employer’s proposed plan is simply a target. The benefit is not fixed or even known. The plan pays a “target” benefit provision based on the funding level permitted in the plan.
The City is proposing a fixed contribution rate in this target plan of between 7 per cent and 8 per cent. If the funding level is insufficient to provide the “target benefit”, benefits must be adjusted. There is no protection to earned benefits, including the benefits of retirees.
The offer to participate in this plan is extended to other employers, but right now it would only cover City of Regina employees.
Why is the City “trash-talking” our plan?
The City continues to trash-talk our our defined benefit plan because they want to scrap it and replace it with a vastly inferior plan. Why? Because their proposed “target plan” is much cheaper. In fact, their proposed plan is so cheap, the employers are offering to assume the current plan’s entire deficit – a deficit that is currently shared with plan members.
That is why the City continues to “trash talk” our defined benefit plan, using words like “unsustainable” and “crisis” every time they speak to the media. That’s also why the City is refusing to increase the contribution rates recommended by the actuary. And that is why the employers are refusing to return to the bargaining table. In fact, they’ve told our bargaining committee they will only meet to discuss their proposal to scrap our existing plan, not our proposals to fix it.
Council votes to violate pension law
Regina City Council refused to accept the actuary’s recommendation to increase the contribution rates for the Regina Civic Pension Plan – a move that puts the City in direct violation of its legal obligations under the Pension Benefits Act.
Council’s risky decision, which astonished many pension plan members, was made at Tuesday’s meeting.
“How can you be expected to set and enforce bylaws that you are unwilling to follow yourselves?” Kirby Benning asked City Councillors at the meeting. Benning chairs the employees’ pension negotiating committee.
Presentation by Kirby Benning, Chair of the Employees’ Negotiating Committee
CUPE staff representative Aina Kagis told Councillors that a decision to deny the rate increase was not in the best interests of taxpayers as it could lead to years of costly litigation.
Presentation by Aina Kagis, Canadian Union of Public Employees
Many of the unions in the plan believe the costs of the pension plan are inflated.
In her presentation to Council, Deb Provost of the SUN local at the Regina General Hospital said it appears “the employers wish to make the plan look unsustainable” so they can reduce their contributions and strip pension benefits for employees.
Presentation by Deb Provost, Saskatchewan Union of Nurses
The employee groups want to obtain a second actuarial opinion to prove the plan is sustainable, but plan’s Administration refuses to share the required data.
Superintendent of Pensions Dave Wild attended Tuesday’s Council meeting. The superintendent is responsible for ensuring employers fulfill their legal obligations under the Pension Benefits Act. Employee groups in the Regina Civic Pension Plan expect the Superintendent to enforce the Act.
Council breaks the rules for Chamber
All submissions to last night’s Council meeting had to be submitted to the City’s clerk by noon on Thursday. That’s the requirement of the city’s “Procedure Bylaw.” CUPE thought it applied to everyone.
But the Regina Chamber of Commerce submitted its presentation yesterday – five days past the deadline. What did Council do? It accepted the Chamber’s presentation and amended its agenda at the start of the meeting.
The Chamber supported Council’s decision to deny the legally required rate increase.
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